The following graph shows the daily market for wine. Suppose the government institutes a tax of $23.20 per bottle. This places a wedge between the price buyers pay and the price sellers receive.

01020304050607080901001009080706050403020100PRICE (Dollars per bottle)QUANTITY (Bottles of wine)Tax WedgeDemandSupply

Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax.

	Quantity	Price Buyers Pay	Price Sellers Receive
(Bottles of wine)	(Dollars per bottle)	(Dollars per bottle)
Before Tax
After Tax

Using the data you entered in the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity of demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table.

	Tax Burden	Elasticity
(Dollars per bottle)
Buyers
Sellers

The burden of the tax falls more heavily on the elastic side of the market.

The following graph shows the daily market for wine. Suppose the government institutes a tax of $23.20 per bottle. This places a wedge between the price buyers pay and the price sellers receive. (?) 100 90 80 70 Supply 60 Tax Wedge 50 PRICE (Dollars per bottle) 40 30 20 10 Demand 10 20 30 40 50 60 70 80 90 100 QUANTITY (Bottles of wine) ch O A W Raining now